OST-97-2776 / Aeromexico / July 31, 1997

 

NOTICE: Any person may support or oppose this application by filing an answer and serving a copy of the answer on counsel for Aerovias de Mexico, S.A. de C.V., and upon persons served with this application no later than August 15, 1997.

 

DATED: July 31, 1997

 

Application of

AEROVIAS DE MEXICO, S.A. DE C.V.

for an Exemption from 49 U.S.C. 41302. (Monclova-Houston)

 

APPLICATION OF

AEROVIAS DE MEXICO, S.A. DE C.V.

FOR AN EXEMPTION FROM 49 U.S.C. 41302

 

Pursuant to 49 U.S.C. 40109(c), Aerovias de Mexico, S.A. de C.V. ("Aeromexico"), respectfully requests an exemption from the provisions of 49 U.S.C. 41302 to the extent necessary to permit it to engage in scheduled foreign air transportation of persons, property and mail between Monclova, Mexico, and Houston, Texas. Aeromexico anticipates instituting the service in the very near future. Since certain preparatory actions must be taken to promote and publicize the service, Aeromexico is requesting that the Department act expeditiously on this application. The exemption is requested for one year. In support of this application, Aeromexico states as follows:

 

Aerovias de Mexico Exemption Application

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1. Aeromexico is a flag carrier of the United Mexican States and currently holds a foreign air carrier permit which authorizes service between Mexico and numerous U.S. points. Order 91-5-25. Pursuant to its permit and various exemption authorities, Aeromexico provides extensive service between Mexico and the United States.

 

2. By this exemption request, Aeromexico seeks authority to engage in scheduled foreign air transportation of persons, property and mail between Monclova, Mexico, and Houston, Texas. Aeromexico plans to serve the market initially with Metro III aircraft via a wet lease arrangement with Aerolitoral, S.A. de C.V., a sister company, 1/ but the company may decide to institute service with large aircraft in the future. The service will consist of one daily round trip on Tuesdays, Wednesdays, Thursdays and Sundays. There currently is no service in the market so the proposed service will provide significant benefits for U.S.-Mexico passengers. Consequently, the proposal is procompetitive.

 

3. Annex 1 to the 1960 Air Transport Agreement, as amended, between the United Mexican States and the United States, provides that a carrier designated by the Government of Mexico is entitled to operate "[f]rom a point or points

 

1/ Contemporaneously herewith, Aerolitoral, S.A. de C.V., is filing an application for a statement of authorization to conduct wet lease operations on behalf of Aeromexico.

 

Aerovias de Mexico Exemption Application

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in Mexico to a point or points in the United States." Aeromexico is in the process of securing the required designation and will notify the Department when that task has been accomplished.

 

4. Under 49 U.S.C. 40109(c), the Department may grant an exemption if it finds that such is consistent with the public interest. It is clear that the designation of a carrier by its homeland government is the most significant factor in determining whether grant of an application is in the public interest. For example, in Linea Aerea Nacional de Chile. Foreign Permit, 26 C.A.B. 604 (1958), the Civil Aeronautics Board stated as follows:

 

Where, as here, the applicant has shown that it holds the appropriate designation under an effective bilateral agreement to operate the route embraced by the application, the applicant has presented highly significant evidence bearing on the public Interest.

 

See also Application of Aerovias Venezolanas S.A., Order 868-88 at 3 (provision for authority in a bilateral is prima facie evidence that grant thereof is in the public interest); Aerolineas Peruanas Foreign Permit, 31 C.A.B. 181 (1960). The same findings are warranted here, where Aeromexico will be designated for the route in question.

 

Aerovias de Mexico Exemption Application

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Moreover, the benefits which the new service will generate for business travelers and tourists alike further demonstrate that the exemption is consistent with the public interest. The proposed service will improve the available air service and facilitate travel in the Mexico-U.S. market to the benefit of the public.

 

5. Given the fact that Aeromexico will be designated for the authority requested herein and the fact that the exemption will only be effective for one year, the request is limited in scope and should be noncontroversial.

 

WHEREFORE, Aerovias de Mexico, S.A. de C.V. respectfully requests that the Department grant the exemption sought herein.

 

Respectfully submitted,

William C. Evans

VERNER, LIIPFERT, BERNHARD, McPHERSON AND HAND, CHARTERED

Suite 700

901 - 15th Street, N.W.,

Washington, D.C. 20005

(202) 371-6030

Counsel for Aerovias de Mexico, S.A. de C.V.

DATED: July 31, 1997